Williams says immediate recognition of productivity shifts produces trivial inflation effects below 0.1 percentage points with instant rate rises.
“Indeed, with immediate recognition (not shown), the depressing effect on the inflation rate is trivial, less than one tenth of a percentage point.”
Williams reports Treasury repo rates fell 15 basis points below IORB in mid-May, causing two basis point EFFR decline.
“Treasury repo rates later notably declined, falling as low as 15 basis points below the interest rate on reserve balances (IORB) in mid-May, though they have since rebounded.”